Thursday, August 4, 2011

Let’s
get this out of the way; I do not give
investment advice nor do I claim to be any sort of investment advisor, what you
do with your money is your business and your responsibility.

So,
with that here’s a look at the ES or S&P E-mini futures taken Thursday
August 4th at 4:12 EST. It is
a daily chart and I have scribbled a few things for your enjoyment.

The
solid red line running at an incline is simply a mean regression line of
average price from March ’09 until today.
The thick black line below that is a trend line drawn from the low
through the July and August lows in ’10.
This established a bottom for me to watch for serious failure or any oversold
market conditions. Notice that we have
broken that trend for the first time in over two years. May not be a big deal depending on your time
frame but it is a big deal because something significant will certainly come out of
this.

In
trading futures I look at everything as an opportunity because I could cares
less which way I trade. Short is just as
profitable as long and frankly the money is made quicker in short positions
because failures are usually sudden and pronounced in an up trending market as
is the case here.

Click to Enlarge

Although
we have broken this trend line it does not necessarily mean this market will
collapse. It very well could be that we
get a nice correction and establish a new trend line or channel. The next few days and couple of weeks will
show us if that is to be the case.

You
will also notice another black line running across the top of the price and
that is another trend line for the downside.
Together the two black lines form a wedge. I like wedges because it is always fun to determine
which way the break outs will occur. Sometimes
you get a ‘head fake’ in that the market takes a sudden move in one direction
lasting but briefly then turns and with vengeance goes the other
direction. This has the effect of
shaking out the weaker hands. Stops a
taken out, volume supporting the move declines and you’re off to the races
without all the baggage of the weaker positions. In futures it’s a zero sum game so once the
losers are kicked out more potential losers climb onboard. BUT, they won’t until the price action
convinces them they are about to miss the boat.
By then it’s usually too late to realize any real profit unless they
recognize what’s happening and stay the course.

The
second chart is just a close up view of the same Daily but only running from
December of 2010 until present. Here you
can clearly see the failure of the trend line.
Now I suggest that this trend line serving as a psychological support
before this week will now have the same effect as a resistance over the next
few days and maybe even weeks. Should
the price run up against this overhead barrier there will be a bidding war
among traders. Those bears will be
selling hell out of it trying to keep price down and the bulls will buy trying
to push price up. This should really be
fun and exciting except for one thing.
There’s a lot of money setting on the side and it is quite possible that
the right people may “get the word” and turn on the money faucet to get this
market running towards new highs. That
red dashed line I have on the close up chart is where I thing the most support
will occur should price go that low. It’s
based on previous tops and lows plus a very strong price according to my
harmonic Fibonacci grid (not shown).
That price resides at 1215.05. At
this time I see nothing from keeping the S&P futures from at least testing
that price. Right now it will struggle
to break through 1259 on the up side and should it close above that the next target will be
the

Click to Enlarge

vicinity of 1270 on the way to test 1300 again.

Remember,
new lows tend to produce further new lows and likewise new highs tend to
produce further new highs. Just
consider your time frame as these patterns are fractal in nature.

So,
those are the scenarios as I see ‘em. Ya
puts ya money down and ya takes yer chances.

Tuesday, August 2, 2011

OK, Congress has done its share now let's tax the rich. This video explains how it works. For all you socialist out there you might want to get some popcorn it's 6 minutes and 25 seconds of some 'splaining.

I grew up in a little town in the South during the 50’s and
60’s. This is a period when America went
through much change economically, socially and in general. The civil rights movement was in full swing
as was the Vietnam War. Through all this
as well as the previous 200 years or so, one thing from the past remained
pretty much intact as this change took place; Making whiskey.

I’m not advocating making or drinking moonshine whiskey although
I admit to taking a taste on occasion. However, I understand the origins,
reasons for it and a little of its history here in America. This is but my personal view on it based on the
information I have.

People here have always made their own whiskey and other
than the obvious reason of “feel good” there really was a practical purpose in making
good corn whiskey. Prior to the great
depression, we as a nation were about 70% an agrarian society. That is, 70% of us farmed. A good percentage of all the farming was
corn. Corn was used for everything from
making meal for breads to feed for animals.
Corn was a big part of life as it was all over America. Sometimes, growing years were plentiful and
other years not so great. As farmers
depended on corn for so much, storing it was prudent. As with anything, you can only store perishable
items for so long. Some farmers figured
out how to store AND increase the value of their corn by adding some water and yeast to it producing the whiskey.
It takes about 6 bushels of corn to make one gallon of whiskey so this
not only extended the storage life of their corn but also relieved them of the
cost of maintaining huge silos. Furthermore, should one be located in an out of
the way place such as in the hills and mountains of Virginia transporting a
gallon of whiskey across the hills was much easier than toting 6 bushels of
corn through the same terrain.